Hedge funds Fret over Possible Caps on Bonuses in EU Rules

Is the European Union about to limit hedge fund
managers’ compensation?

Maybe yes, maybe no. But hedge fund managers are clearly
worried. The EU has issued a mandate, known as Alternative
Investment Fund Managers Directive, providing a set of
guidelines relating to risk and liquidity management,
transparency, reporting and more. The guidelines will affect
alternative investment funds and how they market their products
to EU investors. But the AIFMD has left many questions
unanswered — including the issue of compensation
limits. The directive is due to take effect starting this July,
although funds domiciled outside the EU will have until 2015 or
possibly later to comply.

As of now it isn’t even fully certain which
hedge funds will be subject to the directive. For instance, the
EU authorities have not specified whether a U.S. office of a
London-based hedge...